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September 18, 2007


Shane Barclay

Polanyi thoroughly describes why land, labor, and finance ought to be separated from the market. He makes it clear what the consequences are of incorporating those areas into the economy, and posters above have explained them well. While admitting that the economy is often what society is built upon, he expresses optimism that the economy need not be associated with selfishness; political and sociological logics can prevail over economic logic even when the economy is a dominating societal force.

I find problems with Polanyi’s methods of creating this society without excessively obstructing peoples’ freedoms. Serena has already articulated Polanyi’s alternatives to a market society: “fascist society, the socialist society, and his so-called complex society based on freedom.” The first two options have proven to be difficult to implement without limiting freedom and the third is sound in theory, but would be difficult to implement.

To create a society where “labor is only another name for a human activity which goes with life itself,” “land is only another name for nature,” and “money is merely a token of purchasing power” would be an awfully daunting task. I could only think of two ways in which such a society could exist: intense regulation (such as fascism, that would require the obstruction of freedom) or the foil of that, which would be some form of anarchy. The anarchic form—if achieved as in theory—would most likely have the same result of a market economy: it seems perfect to have little regulation so that land, labor, and money are plentiful, but it would ultimately taper back towards using them as commodities, just as Polanyi dreads in his contemporary world of the market system.

Brenda Castillo

Polanyi believed that in order for society to free themselves economically from the rules of government they saw laissez faire, as Polanyi describes it, as “a mere penchant for non-bureaucratic methods…[that] evolved into a veritable faith in man’s secular salvation through a self-regulating market.” But as Yu stated previously, humans instead became ‘attached to a tag’ controlled by the market society where human interactions were degraded and organized only by trading of goods, quality and price. As a result, society becomes controlled by material wealth and the individual gets caught up with its own well-being rather then the well being of society as a whole. But as Adriana stated previously, the idea that humans get caught up with their own material well-being is not to get the satisfaction of having material goods but to achieve a superior identity in society; and as the world becomes capitalistic, people obtain a higher social status through more wealth. This point is supported also by Orwell when he mentions that the wealthy sector of society is not willing to give up their wealth because it would mean that they would lose their social status and would prefer to not look after the welfare of the other social classes.
In relation to the discussion question, I can only see Polanyi’s argument being successful that by treating labor and land as commodities economic efficiency would be established only if land and labor had the same value across their whole perspective market. However, a commodity is defined as a good that does not have ‘qualitative differentiation across the market,” but people do differ in the physical and intellectual labor each individual can provide and land can vary enormously from one place to another. Therefore, it would be impossible to give land and labor the same value and create them into commodities. Besides, if human labor was limited to perform to just a certain level then that would create social chaos because people would be unhappy to not be able to perform to their highest potential. What I can not understand, however, is why would we want these things to be commodities in the firs place in hopes to achieve a less capitalistic world? Isn’t oil considered a commodity today and has led our country to a major war in order to achieve more of this commodity? If turning things such as land and labor into commodities will not help improve the ‘self-regulating market’ and the only answer to this problem is socialism this would be very unrealistic, as it was also stated in discussion. As Orwell stated earlier as well, it would be very difficult for society as a whole to think of the well being of others and to be willing to distribute wealth equally especially if it means that individuals would lose their social status. As we can see, and based on Polanyi’s arguments, the border between economic logic and political objectives is very difficult to overcome and is hard to achieve a solution that would benefit economically and politically.

Sam Iverosn

As Karl Polanyi argues in Great Transformation, the collapse of free market-economies in the pre-WWI liberal world gave rise to powerful state-regulated economic systems of socialism and fascism. Polanyi offers a socialist argument to resolve the conflict between economic interests and political controls.

In trying to maintain a self-regulated economy, states were forced to take measures to control the economy in order to provide welfare to lower-class citizens. Likewise, he feared that this welfare would disrupt the overall productivity and self-regulation of the market-economy. Thus, the inability to protect either a market-regulated economy or a state-regulated economy led to economic collapse and a transition to greater state control.

Of the two rising forces in political organization of that time, fascism and socialism, Polanyi had criticisms for each. Fascism sacrificed the value of democracy for increased economic growth while socialism embraced political liberty at the expense of growth. Regardless of these conflicts, Polanyi argues that the state should socialize in order to best balance political liberty and economic growth. He recognizes a natural tendency for industrial civilization to move from a self-regulated market to a democratically-ruled market. Polanyi’s new plan for industrial civilization is based upon a collaboration of economic decisions made by governments and the liberty to organize life independently.

Polanyi has one major concern for the prospect of this system. Much like Orwell was frustrated with idealizing socialism, Polanyi argues that a socialist society must be freed from tyranny and the free market system. Only under these conditions can a democratic organization of politics and economy achieve growth and stability.

Brendan Gluck

In response to what Nick said about how Polanyi was wrong in viewing labor, land, and money as commodities, I think Polanyi’s viewpoint, in fact, is the exact same as Nick’s. In his novel, he explicitly states that “labor, land, and money are obviously not commodities.” (75) What Polanyi is claiming is that as a result of “the impact of the Industrial Revolution,” (79) people started treating these elements as commodities. In turn, this trend led to such political upheavals as World War I and the economic disaster of the Great Depression.

Obviously as Nick pointed out, considering today’s times, we can see that land, labor, and money are by no means commoditized. Yet, the Industrial Revolution completely changed the structure of the economy, which greatly affected these elements of society. Rather than tending to the farm, workers were placed in the factory in order to ensure that the brand new machines were working properly. They were given highly specialized tasks that required very little effort, which greatly commoditized labor. Workers were dispensable and the influx of people into the cities, as a result of the inability of families to compete with the factories, allowed the factory owners to treat workers as a commodity, or an object “produced for sale on the market.” (75) As a result of this commoditization of labor, “the system…dispose[d] of the physical, psychological, and moral entity ‘man’ attached to that tag,” (76) which caused these workers to demand reforms and in certain instances, spark revolution.

If these problems were left alone, in the Smithian attempt to let the ‘invisible hand’ of the market solve them, “human society would have been annihilated.” (79) Luckily, the governments of certain nations, like Great Britain, France, and the United States, created “protective counter-moves which blunted the action of this self-destructive mechanism” (79) through their implementation of policies like better worker’s conditions, the creation of worker’s unions, and minimum wage requirements. Those nations that did not attempt to fix the commoditization of land, labor, and money, like the Soviet Union and Germany, were deeply destabilized by revolution and extremism.

Tal Yeshanov

Essentially, Polanyi believes that the thing that destroyed the pre-World War 1 liberal world, are the discrepancies between economic logic and political necessity. However, these two realms of thought need to somehow meet in the middle. When I was reading Polanyi's writing the thing that most struck me is the middle ground between the economic factors and how institutions such as what, how and which operations government allows for the economy to implement. According to Polanyi, he believed that if society were to commodify things, then a revolution would occur. Such a revolution could in fact cause an entire economy to fall. In my opinion society and the way it is governed and economics in term of who/what/where is carried out are inseparable and it would do the system no justice to separate the two since they are dependant on each other.

Ultimately government should be responsible for the people. An example of something the government can do is to allocate scarce resources well among the society. This is crucial because it will allow for everyone to benefit more than they would otherwise before the distribution would have occurred. Another thing I thought was interesting in Polanyi's thoughts were that he decided against the socialist and fascist systems. While I would prefer a capitalist system a lot more than I would a fascist/socialist system, I think that it is wrong just to rule them out because for some societies (even in today’s world) those systems can work and are seen as advantageous.

David Guarino

What can we take away from Polanyi? Many have expressed their sympathy for the argument that land, labor, and money are intrinsically incompatible with marketization. The demand and, more importantly, the supply of these has sprung - and will continue to spring - from non-market conditions. Therefore, the commodification of these inputs which is so necessary for the self-adjustment of the market to take place is forever incomplete.

While this may be a contribution to the literature, it's old hat. The normative idea that these things cannot be commodified is not the same as an empirical, positive critique. As we have seen, distribution may have originally been given by non-market factors, but the coagulation of fields, manpower, and purchasing power into markets is far from impossible, despite cries of its undesirable nature.

At any rate, it's certainly secondary to Polanyi's broader, highly original contribution: that market forces compete for control of society with other forces - the social, political, psychological and other logics which drive history. His "double-movement" is a narrow example of this competition, between the economic and political means of distribution, but nevertheless a salient case.

What is so compelling here is the idea that the rationalization of the world - even here in the narrow economic-distribution case - is not a one-way street. Other forces can and will reassert themselves when the outcomes themselves allow for it.

Markets themselves being embedded in democratic institutions will always allow for the possibility of intervention. These interventions will generally respond in equal magnitude to the perceived morally-offensive outcome created by market forces. Whereas pollution might lead to a higher tax on gasoline (meaning a political logic - the exercise of force by imprisonment upon those who do not pay this tax - subsumes the pure economic logic of incentives), economic catastrophe on the scale of the interwar German experience will lead to a much fuller replacement of market logic (in this case in favor of a national-cultural logic governing society).

When market logic fails to bring prosperity, it is quite rational for individuals to opt for a different societal logic. The point is that people see outcomes and adjust the acceptability of processes based on those outcomes. More importantly, logics alternate to the market do not simply melt into air. There merely fade into the background for as long as the market itself is living up to its promise. When that promise is broken, is it any surprise to see a return to one of the many non-market logics of society?

houtan Zojaji

Karl Polanyi’s The Great Transformation of 1944 provides a substantive critique of modern market society based in economic history and social theory. Polanyi seeks to demonstrate how humans have been left out of the equation of market liberalism, and how, ever since the very creation of the self-regulated markets, history has been defined by a Double Movement comprised of social protectionist movements counteracting attempts at market liberalization.

Polanyi explaines human beings and the environment are subjected to the market mechanism. As such, land, labor and money—elements normally taken as sacred components of human society—are commoditized and put on market. As these are entities not originally produced for market-sale, Polanyi terms them ‘fictitious commodities’ and views their commoditization as the tearing asunder of the primary threads of society. He concludes that society at all levels fights against movements towards market liberalization, chiefly in an effort to preserve fictitious commodities. Human inclinations of protecting community and preserving society create an inevitable and concerted response on behalf of society. He argues that this conflict between economic logic and political necessity is the thing that destroyed the pre-World War I liberal world and led to the rise of socialism and fascism as alternatives.
While Polanyi does allow for various combinations of market liberalization and social protection at different points of history, his argument still does not offer much flexibility or variation. For example, just a few decades after the publication of The Great Transformation, the Cold War erupted--an event not at all foreseen by Polanyi. Thus, while his theories are able to explain may relationships within society (market and state, social movements nd market liberalization movements, self-regulation and increased human or environmental degradation) there are still some holes that cannot be filled because of lack of flexibility in his argument.
I do not believe that the damage from the conflict is as disastrous as Polanyi states. Although, economic logic and political objectives contrast at times, they are interdependent and their problems are linked. Even though the factors define commodities differently, they have worked together before. It is hard not for economic logic and political necessity not to rely on each other, they are socially linked.

Ada Tso

Karl Polanyi’s work, “The Great Transformation,” has a great many reasons for deserving appreciation and attention. His strong emphasis on recognizing the economy as a part of society, rather than some sort of separate entity, is refreshing and somewhat unusual compared to other authors we’ve read in PEIS 100 and thus far in 101. I agree that not everything is based on self-interest and that “economic rationality” is not the driving force to all behavior, but I take issue with his assertion that the market society is a conscious construct. It seems patently untrue to claim that “previously to our time no economy has ever existed that, even in principle, was controlled by markets.” I think the market did arise more or less organically because it seemed to be the most logical way to organize the exchange of goods and services.

Finally, Polanyi’s somewhat ambivalent ideas about socialism remind me a great deal of Orwell’s views. In section, someone wondered what Orwell would think of the Scandinavian semi-socialist systems and I think, more so than Orwell, Polanyi would be quite approving.

John Keh

Karl Polanyi wrote about the economic and social decline due to the erosion of morals and common decency. He uses these circumstances as a cause for the rise of fascism and socialism. He heavily criticizes both of these forms of government, but ultimately sides with socialism as a means to stability and balance between economic and social welfare. He blames the collapse of the free market system on the exploitation of land and labor, but he also believed that a well formed socialist government would solve the problems of having land and labor being commoditized and keep the outrageous human greed developed in the early 1900’s in control.
Polanyi hoped to create a better society with his ideals. He shared many common views with George Orwell. They both saw the problems with socialists of their day and the over glorification of socialism. They both also witnessed and wrote about the moral and economic decay of society. I believe that creating the socialist society that these to authors dreamt of would lead to a balance in economic growth and innovation as well as a sturdy, moral society. However I do not feel that such a balance can ever be reached. I believe that the human greed that so perfectly describes the pre-World War I state is an inherent human trait, and though we may try to tame it, a truly uncorrupt, balanced state will never be able to be achieved.

Michael Pimentel

It seems that now, more than ever, discussions about global warming, universal health care, and the continuation of an unjust war have brought to light the great inequities of our market system. In the past, as Polanyi wrote, market systems were nothing more than "accessories to economic life." However, we've managed, by sheer greed, or perhaps less caustically, though ignorance, to strip humanity and its social agenda from our market affairs; we've transformed our society so deleteriously that we’ve “subordinated the substance of society itself to the laws of the market.” A market system should only exist insofar as it empowers those who give life.

To answer Professor Delong’s question, we can expand on Polanyi’s thoughts by putting into action, market regulations which carry with them some degree of societal responsibility. We must make it known that the pursuit of profit is secondary to the betterment of society; we must support legislation that seeks to expand social programs and we must fund progressive change not by burdening ourselves, but by levying taxes on those who have become disassociated with their humanity and who have lost their sense of compassion. There is no reason why we as people should allow ourselves to be degraded.

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